The EUR/USD pair initially tried to rally during the day on Thursday, but found quite a bit of resistance near the 1.13 level. By doing so, we ended up forming a bit of a shooting star, and it now appears that this market really isn’t ready to do anything for any real length of time. I have been saying this for a while, then I believe this market is one of the most volatile and probably frustrating markets to be involved in when it comes to Forex trading, which is ironic considering how it is normally the pair that people start out with.
The shape of the candle certainly gives me pause, because it is so negative looking. I have the suspicion that the 1.13 level will be one that’s difficult to overcome, but at the same time I believe that the 1.11 level below should be massively supportive. In other words, I think we are simply going to continue to consolidate and bounce around in this very small area.
200 pips
I believe that the ranges roughly 200 pips, so if you are a short-term trader you can certainly sell near the 1.13 level, and that of course buying down at the 1.11 level would be the opposite move. Eventually we should break out, and of course the fact that we have the GDP numbers coming out of America today could be the catalyst, but quite frankly it appears that the markets are a bit confused after the recent Federal Reserve announcement and more importantly the statement. The fact that we couldn’t have interest rates rise suggests that there is still a lot of trepidation in the United States, although the central bank was very quick to point fingers at the rest of the world for the lack of action. Either way, this puts a bit of a damper on US dollar strength, although some people will be buying the currency for safety. In other words, expect more confusion.
